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Segment Disclosures | 6 Months Ended
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Jun. 30, 2015
Segment Disclosures |
Segment Disclosures | NOTE 14. Segment Disclosures The Company evaluates its business and makes resource allocations based on its five business segments: (i) senior housing, (ii) post-acute/skilled nursing, (iii) life science, (iv) medical office and (v) hospital. Under the medical office segment, the Company invests through the acquisition and development of MOBs, which generally require a greater level of property management. Otherwise, the Company primarily invests, through the acquisition and development of real estate, in single tenant and operator properties and debt issued by tenants and operators in these sectors. The accounting policies of the segments are the same as those described in Note 2 to the Consolidated Financial Statements herein and in the Company’s 2014 Annual Report on Form 10-K filed with the SEC. There were no intersegment sales or transfers during the six months ended June 30, 2015 and 2014. The Company evaluates performance based upon property net operating income from continuing operations (“NOI”), adjusted NOI (cash NOI) and interest income of the combined investments in each segment. Non-segment assets consist primarily of corporate assets, including cash and cash equivalents, restricted cash, accounts receivable, net, marketable equity securities, deferred financing costs and, if any, real estate held for sale. Interest expense, depreciation and amortization, and non-property specific revenues and expenses are not allocated to individual segments in determining the Company’s segment-level performance. See Note 19 for other information regarding concentrations of credit risk. Summary information for the reportable segments follows (in thousands): For the three months ended June 30, 2015:
|  |  |  |  |  |  |  |  |  |  | Investment |  |  |  |  |  |  |  |  |  |
|  | Rental |  | Resident Fees |  | Interest |  | Management |  | Total |  |  |  | Adjusted |
Segments |  | Revenues(1) |  | and Services |  | Income |  | Fee Income |  | Revenues |  | NOI(2) |  | (Cash) NOI(2) |
Senior housing |  | $ | 123,910 |  | $ | 106,838 |  | $ | 12,237 |  | $ | — |  | $ | 242,985 |  | $ | 154,234 |  | $ | 155,472 |
Post-acute/skilled |  |  | 130,895 |  |  | — |  |  | 23,708 |  |  | — |  |  | 154,603 |  |  | 130,357 |  |  | 111,280 |
Life science |  |  | 85,409 |  |  | — |  |  | — |  |  | 1 |  |  | 85,410 |  |  | 68,175 |  |  | 65,430 |
Medical office |  |  | 102,585 |  |  | — |  |  | — |  |  | 457 |  |  | 103,042 |  |  | 61,800 |  |  | 60,630 |
Hospital |  |  | 21,492 |  |  | — |  |  | — |  |  | — |  |  | 21,492 |  |  | 20,221 |  |  | 20,447 |
Total |  | $ | 464,291 |  | $ | 106,838 |  | $ | 35,945 |  | $ | 458 |  | $ | 607,532 |  | $ | 434,787 |  | $ | 413,259 |
For the three months ended June 30, 2014:
|  |  |  |  |  |  |  |  |  |  | Investment |  |  |  |  |  |  |  |  |  |
|  | Rental |  | Resident Fees |  | Interest |  | Management |  | Total |  |  |  | Adjusted |
Segments |  | Revenues(1) |  | and Services |  | Income |  | Fee Income |  | Revenues |  | NOI(2) |  | (Cash) NOI(2) |
Senior housing |  | $ | 151,904 |  | $ | 37,939 |  | $ | 3,430 |  | $ | — |  | $ | 193,273 |  | $ | 165,020 |  | $ | 153,476 |
Post-acute/skilled |  |  | 138,548 |  |  | — |  |  | 13,507 |  |  | — |  |  | 152,055 |  |  | 138,015 |  |  | 122,105 |
Life science |  |  | 77,541 |  |  | — |  |  | — |  |  | 1 |  |  | 77,542 |  |  | 62,092 |  |  | 59,339 |
Medical office |  |  | 91,541 |  |  | — |  |  | — |  |  | 443 |  |  | 91,984 |  |  | 54,376 |  |  | 53,770 |
Hospital |  |  | 21,267 |  |  | — |  |  | — |  |  | — |  |  | 21,267 |  |  | 20,370 |  |  | 20,475 |
Total |  | $ | 480,801 |  | $ | 37,939 |  | $ | 16,937 |  | $ | 444 |  | $ | 536,121 |  | $ | 439,873 |  | $ | 409,165 |
For the six months ended June 30, 2015:
|  |  |  |  |  |  |  |  |  |  | Investment |  |  |  |  |  |  |  |  |  |
|  | Rental |  | Resident Fees |  | Interest |  | Management |  | Total |  |  |  | Adjusted |
Segments |  | Revenues(1) |  | and Services |  | Income |  | Fee Income |  | Revenues |  | NOI(2) |  | (Cash) NOI(2) |
Senior housing |  | $ | 251,292 |  | $ | 211,851 |  | $ | 19,631 |  | $ | — |  | $ | 482,774 |  | $ | 311,119 |  | $ | 305,944 |
Post-acute/skilled |  |  | 271,471 |  |  | — |  |  | 49,576 |  |  | — |  |  | 321,047 |  |  | 270,400 |  |  | 233,240 |
Life science |  |  | 168,960 |  |  | — |  |  | — |  |  | 2 |  |  | 168,962 |  |  | 135,027 |  |  | 129,207 |
Medical office |  |  | 200,890 |  |  | — |  |  | — |  |  | 916 |  |  | 201,806 |  |  | 121,853 |  |  | 118,817 |
Hospital |  |  | 43,734 |  |  | — |  |  | — |  |  | — |  |  | 43,734 |  |  | 41,426 |  |  | 41,904 |
Total |  | $ | 936,347 |  | $ | 211,851 |  | $ | 69,207 |  | $ | 918 |  | $ | 1,218,323 |  | $ | 879,825 |  | $ | 829,112 |
For the six months ended June 30, 2014:
|  |  |  |  |  |  |  |  |  |  | Investment |  |  |  |  |  |  |  |  |  |
|  | Rental |  | Resident Fees |  | Interest |  | Management |  | Total |  |  |  | Adjusted |
Segments |  | Revenues(1) |  | and Services |  | Income |  | Fee Income |  | Revenues |  | NOI(2) |  | (Cash) NOI(2) |
Senior housing |  | $ | 301,989 |  | $ | 75,992 |  | $ | 6,714 |  | $ | — |  | $ | 384,695 |  | $ | 328,610 |  | $ | 303,851 |
Post-acute/skilled |  |  | 276,328 |  |  | — |  |  | 26,919 |  |  | — |  |  | 303,247 |  |  | 275,263 |  |  | 240,204 |
Life science |  |  | 153,663 |  |  | — |  |  | — |  |  | 2 |  |  | 153,665 |  |  | 124,053 |  |  | 118,168 |
Medical office |  |  | 180,803 |  |  | — |  |  | — |  |  | 891 |  |  | 181,694 |  |  | 108,122 |  |  | 106,799 |
Hospital |  |  | 42,812 |  |  | — |  |  | — |  |  | — |  |  | 42,812 |  |  | 40,965 |  |  | 41,136 |
Total |  | $ | 955,595 |  | $ | 75,992 |  | $ | 33,633 |  | $ | 893 |  | $ | 1,066,113 |  | $ | 877,013 |  | $ | 810,158 |
| (1) |  | Represents rental and related revenues, tenant recoveries and income from DFLs.
| (2) |  | NOI and Adjusted NOI are non-GAAP supplemental financial measures used to evaluate the operating performance of real estate. The Company defines NOI as rental and related revenues, including tenant recoveries, resident fees and services, and income from DFLs, less property level operating expense; NOI excludes all other financial statement amounts included in net income (loss) as presented below. The Company believes NOI provides relevant and useful information because it reflects only income and operating expense items that are incurred at the property level and presents them on an unleveraged basis. Adjusted NOI is calculated as NOI after eliminating the effects of straight-line rents, DFL accretion, amortization of market lease intangibles and lease termination fees. Adjusted NOI is oftentimes referred to as “cash NOI.” The Company uses NOI and adjusted NOI to make decisions about resource allocations, and to assess and compare property level performance, and evaluate its same property portfolio. The Company believes that net income (loss) is the most directly comparable GAAP measure to NOI. NOI should not be viewed as an alternative measure of operating performance to net income (loss) as defined by GAAP because it does not reflect various excluded items. Further, the Company’s definition of NOI may not be comparable to the definition used by other REITs or real estate companies, as those companies may use different methodologies for calculating NOI.
The following is a reconciliation of reported net income (loss) to NOI and adjusted NOI (in thousands):
|  | Three Months Ended June 30, |  | Six Months Ended June 30, |
|  | 2015 |  | 2014 |  | 2015 |  | 2014 |
Net income (loss) |  | $ | 167,748 |  | $ | 222,279 |  | $ | (69,755) |  | $ | 485,902 |
Interest income |  |  | (35,945) |  |  | (16,937) |  |  | (69,207) |  |  | (33,633) |
Investment management fee income |  |  | (458) |  |  | (444) |  |  | (918) |  |  | (893) |
Interest expense |  |  | 118,632 |  |  | 106,842 |  |  | 235,412 |  |  | 213,480 |
Depreciation and amortization |  |  | 120,403 |  |  | 113,133 |  |  | 234,925 |  |  | 220,521 |
General and administrative |  |  | 28,845 |  |  | 21,656 |  |  | 53,618 |  |  | 42,555 |
Acquisition and pursuit costs |  |  | 18,407 |  |  | 7,406 |  |  | 21,797 |  |  | 7,901 |
Impairments |  |  | 44,835 |  |  | — |  |  | 523,299 |  |  | — |
Gains on sales of real estate, net of income taxes |  |  | (61) |  |  | — |  |  | (6,325) |  |  | — |
Other income, net |  |  | (11,055) |  |  | (709) |  |  | (12,779) |  |  | (2,639) |
Income tax (benefit) expense |  |  | (4,563) |  |  | 1,339 |  |  | (4,640) |  |  | 2,785 |
Equity income from unconsolidated joint ventures |  |  | (12,001) |  |  | (14,692) |  |  | (25,602) |  |  | (29,220) |
Total discontinued operations |  |  | — |  |  | — |  |  | — |  |  | (29,746) |
NOI |  |  | 434,787 |  |  | 439,873 |  |  | 879,825 |  |  | 877,013 |
Straight-line rents |  |  | (8,202) |  |  | (12,487) |  |  | (17,748) |  |  | (26,455) |
DFL accretion |  |  | (21,210) |  |  | (17,813) |  |  | (41,514) |  |  | (39,235) |
Amortization of above and below market lease intangibles, net |  |  | (258) |  |  | (175) |  |  | (636) |  |  | (343) |
Lease termination fees |  |  | 8,142 |  |  | (233) |  |  | 9,185 |  |  | (811) |
NOI adjustments related to discontinued operations |  |  | — |  |  | — |  |  | — |  |  | (11) |
Adjusted (Cash) NOI |  | $ | 413,259 |  | $ | 409,165 |  | $ | 829,112 |  | $ | 810,158 |
The Company’s total assets by segment were (in thousands):
|  | June 30, |  | December 31, |
Segments |  | 2015 |  | 2014 |
Senior housing |  | $ | 9,449,641 |  | $ | 8,383,345 |
Post-acute/skilled nursing |  |  | 6,511,511 |  |  | 6,875,122 |
Life science |  |  | 4,187,616 |  |  | 4,154,789 |
Medical office |  |  | 3,404,395 |  |  | 2,988,888 |
Hospital |  |  | 639,807 |  |  | 640,253 |
Gross segment assets |  |  | 24,192,970 |  |  | 23,042,397 |
Accumulated depreciation and amortization |  |  | (2,778,924) |  |  | (2,600,072) |
Net segment assets |  |  | 21,414,046 |  |  | 20,442,325 |
Other non-segment assets |  |  | 934,081 |  |  | 927,615 |
Total assets |  | $ | 22,348,127 |  | $ | 21,369,940 |
At both June 30, 2015 and December 31, 2014, goodwill of $50 million was allocated to segment assets as follows: (i) senior housing—$31 million, (ii) post-acute/skilled nursing—$3 million, (iii) medical office—$11 million and (iv) hospital—$5 million.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8981-108599 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9038-108599 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 33 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8971-108599 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8595-108599 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8380-108599 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8984-108599 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9031-108599 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9054-108599 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8538-108599 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 29 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8864-108599 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8924-108599 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8906-108599 + Details
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